Published tribunal order
Tenancy Tribunal case 5033889 — Property damage at Unit/Flat 2, 24 Frank Evans Place, Henderson, Auckland
Decided 2 Feb 2025 · Published 2 Feb 2025 · Application 5033889
Landlord favoured
- Property damage
- Rent arrears
- Cleanliness
Order
- Alana May TeKahupake Patangata must pay Rentex Limited As Agent For Sun Family Trust $7939.32 immediately, calculated as shown in the table below:
- The Bond Centre is to pay the bond of $2,480.00 (5041684-007) to Rentex Limited As Agent For Sun Family Trust immediately.
Reasons
- Both parties attended the hearing.
- The landlord has applied for rent and water arrears, compensation, refund of the bond, and reimbursement of the filing fee following the end of the tenancy. A. Legal considerations:
- With any claim before the Tenancy Tribunal, the Tribunal applies the usual civil law standards and expectations. One of these standards is that it is for the party bringing the application to establish their claims “on the balance of probabilities”. That means that the party bringing the claim must establish that what they are claiming is more likely than not. To put that into a mathematical context, the applicant must prove their claim to just over the 50% probability mark. This is referred to as the “burden of proof”. Independent witnesses, corroborating documents and photographs are an important part of discharging this burden.
- As noted by the District Court in Kaipo v Clarke & McCarthy (DC) TT233/02, in practical terms this means that: ... [L]ike anyone who brings an application before a Tribunal or Court, it is incumbent upon the applicant to provide the evidence necessary to prove the case. If the applicant fails to do that, then their application will be dismissed whether it has merit or not because it is up to the applicant to provide the necessary evidence. It is not up to the other parties, and it is certainly not up to the Tribunal to extract evidence.
- If the claim is not established to the balance of probability, it must be dismissed. B. How much is owed for rent?
- The tenancy ended on 07 October 2024. The landlord provided rent records in the form of a rent ledger showing that the rent arrears are $772.00. The tenant did not dispute this claim and I award the full sum claimed for rent arrears. C. How much is owed for water rates?
- The landlord has provided invoices for water rates and a ledger which prove the amount owing at the end of the tenancy for unpaid water rates is: $1426.29.
- The tenant said she thought a payment had been made to the landlord to cover the water rates arrears. The tenant was given until 4pm on Friday, 31 January 2025 to provide evidence to the Tribunal to support this assertion. The requested information has not been provided to the Tribunal.
Did the landlord have a duty to mitigate its losses in respect of unpaid water rates?
- The tenant has been in continuous rent arrears since March 2022. Landlords have a duty to mitigate their losses. Section 49 of the Residential Tenancies Act 1986 (RTA) provides: Where any party to a tenancy agreement breaches any of the provisions of the agreement or of this Act, the other party shall take all reasonable steps to limit the damage or loss arising from that breach, in accordance with the rules of law relating to mitigation of loss or damage upon breach of contract.
- The landlord’s obligation is to take all reasonable steps to mitigate his losses. 1 In the District Court decision of David Huang v Carne Ashworth [2024] NZDC 15726 [3 July 2024], Judge NJ Sainsbury held that where the issue is significant rent arrears, mitigation can include terminating the tenancy: ... where the tenant fails to pay rent owing, there is an obligation the landlord to mitigate the loss. This can be achieved by not allowing the arrears to continue to accrue, instead ending the tenancy and reletting the premises thereby preventing ongoing loss.
- Section 56 of the RTA provides: (1) On an application made to it under this section by the landlord or the tenant, the Tribunal may make an order terminating the tenancy if the Tribunal is satisfied that— (a) the other party has committed a breach of any of the provisions of the tenancy agreement (including provisions relating to the payment of rent) or of this Act; and (b)in the case of a breach capable of remedy,— (i) the applicant gave to the other party a notice specifying the nature of the breach complained of and requiring the other party to remedy the breach within a reasonable period, being not less than 14 days commencing with the day on which the notice was given; and (ii)the other party failed to remedy the default within the required period; and (c)that the breach is of such a nature or of such an extent that it would be inequitable to refuse to make an order terminating the tenancy.
- The landlord confirmed at the hearing that invoices for water rates were sent to 1 See British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London [1912] AC 673 (HL) at 689. the tenant every month. By failing to pay the water rates, the tenant was in breach of the tenancy agreement. The landlord could have issued 14-day notices to the tenant and, if the tenant persistently failed to remedy those breaches, the landlord could have applied to the Tribunal for termination of the tenancy in accordance with section 56 of the RTA.
- The landlord said that he did chase the tenant for payment. The landlord said that the tenant say would say that she would then make payment then fail to do so. The landlord did not issue any 14-day notices.
- In David Huang v Carne Ashworth, Judge NJ Sainsbury decided that landlord had failed to mitigate his losses and said: [w]here a tenant repeatedly breaches promises to make up arrears and instead additional arears are incurred there comes a point when it is being naïve or careless to your owner interest to persist given the tenant more time to pay.
- In my view, the landlord has not acted reasonably to mitigate its losses. As a result, the landlord has incurred losses which would have been avoidable otherwise.
- I reduce the amount of the water rates due by one quarter and award $1,069.72 for unpaid water rates. D. Did the tenant comply with their obligations at the end of the tenancy?
- Section 40(1)(e)(ii)-(v) of the RTA provides that at the end of the tenancy the tenant must leave the premises reasonably clean and tidy, remove all rubbish, return all keys and security devices, and leave all chattels provided for their benefit. Section 40(1)(ca) of the RTA provides the tenant is required to replace worn out smoke alarm batteries during the tenancy. The tenant must also replace standard light bulbs.
- The tenant did not leave the premises reasonably clean and tidy, and did not remove all rubbish.
- The landlord has provided an invoice for cleaning of the premises for $1,035.00. the landlord’s insurer has accepted a claim for this work and the landlord is seeking the insurance excess of $550.00. The landlord provided photographs showing that a significant amount of cleaning work was required. The tenant said she is not disputing this claim.
- The landlord is claiming $1,610.00 (including GST) for removal and disposal of rubbish. The landlord has provided an invoice to support this claim. The landlord provided photographs showing a significant amount of rubbish was left at the tenancy. The tenant said she is not disputing this claim.
- The landlord is also claiming for replacement of a door lock for $230.00 (including GST) which the landlord says was necessary because the tenant did not return the keys. The tenant said she is not disputing this claim.
- These claims are proved I award d $550.00 in respect of cleaning costs, $1,610.00 (including GST) for removal of rubbish, and $230 (including GST) for the replacement door lock. E. Is the tenant responsible for the damage to the premises? The law:
- Sections 40(2)(a), 41 and 49B of the RTA provides that a landlord must prove that damage to the premises occurred during the tenancy and is more than fair wear and tear. If this is established, to avoid liability, the tenant must prove they did not carelessly or intentionally cause or permit the damage. Tenants are liable for the actions of people at the premises with their permission.
- Section 49B(3)(a) of the RTA provides that where the damage is caused carelessly, and is covered by the landlord's insurance, the tenant's liability is limited to the lesser of the insurance excess or four weeks' rent (or four weeks' market rent in the case of a tenant paying income-related rent).
- Section 49B(3)(b) of the RTA provides that where the damage is careless and is not covered by the landlord's insurance, the tenant's liability is limited to four weeks' rent (or market rent). Section 49B(3A)(a) of the RTA provides that where insurance money is irrecoverable because of the tenant's conduct, the property is treated as if it is not insured against the damage.
- Section 49B(1) of the RTA provides that tenants are liable for the cost of repairing damage that is intentional or which results from any activity at the premises that is an imprisonable offence. This applies to anything the tenant does and anything done by a person they are responsible for.
What is the applicable insurance excess?
- Since August 2019, section 13A(2) of the RTA provides that landlords must provide insurance information in any new tenancy agreement. The required information includes whether or not the property is insured and the excess applicable relevant to the tenant’s liability for destruction or damage.
- If this information changes during the tenancy, subsection 13A(4) of the RTA provides that the landlord must provide the correction information to the tenant in writing within a reasonable time after the landlord becomes aware of the change.
- In Tenant v Philpot and Philpot [2021] NZTT 4295509, 4296039, the tenancy agreement recorded that the landlord’s insurance excess was $400. However, the landlord stated that this was a mistake, and the excess was actually $2,150.00. the Tribunal found that as the landlord was required by law to record in the tenancy agreement the applicable excess level that applied. As the landlord had failed to do so, the landlord was bound by an excess of $400.
- The tenancy agreement between the parties provides that the landlord has insurance and that the applicable excess is $400. The landlord advised at the hearing that this had changed during the tenancy to $550. The landlord was unable to provide any evidence that the tenant had been advised of this change in writing as required by section 13A(4) of the RTA. The applicable access is that stated in the tenancy agreement: $400.00.
- Having said that, I have found that some of the damage which was caused during the tenancy was caused by the tenant intentionally. That means that it was open to the landlord to seek recovery for the full amount, not just the insurance excess.
- It is a general principle that insurance payments do not reduce liability for damages (Anderson v James (1908) 28 NZLR 34). The law of subrogation may require the landlord to account for any recovery to insurers, but the insurance payment does not reduce the tenant’s liability.
- The landlord has only claimed for the insurance excess of $550 for some of the damage which I have found to be intentional. The landlord could have claimed for the full amount for the intentional damage. There is a general principal in common law that you cannot get more than you seek (See McCulloch and Partners v Vicki Smith CA CA133/03 [3 December 2003]) and I decline to order more than what the landlord has sought for the claim. However, where I have found that the damage was intentional, I have awarded the full excess claimed ($550.00) and not the excess amount listed in the tenancy agreement ($400.00). The claims for damage:
- The landlord is claiming for the following damage: a) Damage to the carpet: i. The landlord has provided photographs from the start of the tenancy and photographs from the end of the tenancy showing there was a significant amount of damage to the carpet. The tenant advised that the damage was caused by her cats, a hair dye incident and spilt drinks. The tenant said she is not disputing her liability for this claim. ii. Damage is intentional where a person intends to cause damage and takes the necessary steps to achieve that purpose. Damage is also intentional where a person does something, or allows a situation to continue, knowing that damage is a certainty. (See Guo v Korck [2019] NZHC 1541.) The tenant’s cats have done extensive damage to the carpets and the curtains (see below). I find that the damage was intentional because the tenant allowed the situation to continue, knowing that damage would result. The remainder of the damage I consider to be careless. i. The landlord advises that a total of 7 claims have been identified and accepted by the landlord’s insurer in respect of the carpet. The landlord is claiming for 7 x the insurance excess of $550.00 for replacement of the carpet. ii. It is necessary for me to consider betterment and depreciation. The landlord should be returned to the position they would have been in had the tenant not breached their obligations and should not be better or worse off. iii. The Inland Revenue’s Guidance on Depreciation for Residential Rentals Chattels states that carpet has a lifespan of 8 years. 2 I have applied a depreciation rate of 17.5% per year. The landlord has advised that the carpet was 3 years and 10 months old. The estimate to repair the carpet is $3732.06 (including GST). After taking into account depreciation the amount is $2,169.24 (including GST). The landlord is claiming 5 excesses. When divided by 5, the amount comes in at over the excess in the tenancy agreement: $433.85. However, as the damage was intentional I do not consider it is appropriate to reduce the amount claimed to the excess of $400.00. I award $2,169.24 for this claim. b) Damage to the curtains: iii. The landlord is claiming the cost of $805.00 (including GST) to replace 5 curtains. The tenant admits that the curtains were damaged and needed to be replaced. She said the damage was done by her cats. iv. An insurance claim was not made in respect of this damage. Therefore, it is necessary for me to consider if the damage was intentional (if so the tenant will be liable for the full amount) or careless (if so the tenant will only be liable the amount of the excess stated in the tenancy agreement). v. As set out in paragraph 34a)ii) above, damage is intentional where a person does something, or allows a situation to continue, knowing that damage is a certainty. The tenant’s cats have done extensive damage to the curtains. I find that the damage was intentional because the tenant allowed the situation to continue, knowing that damage would result. vi. I award the sum of $805 (including GST) for this claim. 2 https://www.taxtechnical.ird.govt.nz/determinations/depreciation/general/dep-80-residential-rental- property-chattels, retrieved on 01 February 2025. c) Repair of the bedroom window: i. The landlord has provided an invoice for $402.50 (including GST) to replace the smashed glass in a bedroom window. The tenant does not dispute that the window was broken during the tenancy. She said that her daughter threw something at the window, and it broke. The tenant is not disputing that she is liable for this cost. ii. I find this damage to be intentional and award $402.50 (including GST) for this claim. d) Damage to the wall – marker pen: i. The landlord is claiming for repairs to one of the walls in respect of a drawing on the wall with a marker pen. The tenant admits that she drew the picture on the wall during the tenancy. The tenant said she is not disputing that she is liable for this damage. ii. The landlord provided an email from the landlord’s insurer where the insurer identified this damage as “malicious damage (graffiti painted on wall)”. I consider this to be an accurate description of the damage to the wall. The damage was intentional. Therefore, it was open to landlord to claim the full amount for this damage (see paragraphs 31-32 above). iii. The landlord has advised that the insurance company has accepted the claim and the landlord has only claimed for the excess of $550.00. iv. As this is intentional damage, I award the full amount claimed by the landlord ($550.00) in respect of this claim. e) Other damage to the walls: i. The landlord has provided photographs that in addition to the drawing on the wall, there was other damage which required repair work and painting at a cost of $747.00 plus GST. This included stickers on the wall, a dent in the wall behind the door handle, damage to some paintwork which the tenant says was caused by an incense stick being too close to the wall, and damage to another wall which the tenant says was caused by a “scuffle” she had with a family member. ii. Insurance was not claimed for this damage. As they were separate matters, it is likely that the amount would have been less than the excess. The tenant says she accepts that she is liable for the damage to the walls. iii. I find the damage to be careless and award $747 (including GST) for this claim. f) Other damage – various: i. The landlord is also claiming for repairing the toilet roll holder at $92.00 (including GST), repairing the bathroom rail, repairing the garage and the corridor lights $184.00 (including GST) and repairing the garden shed door $345.00 (including GST). The tenant accepts this these items broke during the tenancy. However, she says that they broke due to wear and tear. The landlord disagrees. ii. Given the complete lack of respect the tenant has had for the premises including drawing with marker pen on the wall and allowing her cats to do extensive damage to the carpets and the curtains, I consider it is more likely than not that this damage was either intentional or careless. iii. These claims are proved, and I award $1,426.00 (including GST) for these claims. F. Filing fee:
- Rentex Limited As Agent For Sun Family Trust has substantially succeeded with the claim. For this reason, I have ordered reimbursement of the filing fee.